Amazon ups its online advertising offering

PHILIP ELLIS on 15 January, 2018 at 11:01

The online advertising duopoly of Facebook and Google could soon become a triumvirate, with the ascent of Amazon as a real contender. The ecommerce giant’s advertising revenue is expected to reach $4.5 billion this year, and industry analysts expect the company to emerge as the third major scaled digital ad platform.

Amazon has one of the fastest growing digital advertising businesses, ahead of tech companies like Twitter and Snap, with significant revenue growth in the last twelve months. “We expect Amazon’s ad revenue to grow rapidly over the next few years, reaching $6.6 billion in 2019,” says JPMorgan analyst Doug Anmuth, citing the company’s access to data, in-market customers, scale, and leading market share in smart speakers as contributing factors.

2017 saw Amazon invest heavily in developing its advertising business, including building new programmatic AdTech for publishers on third-party sites, and accelerating its ad sales hires ahead of opening a dedicated advertising office in New York City. And putting all that work into its advertising offering is paying off; advertising holding companies WPP, Publicis and Omnicom all intend to significantly increase their spend on Amazon this year, totalling a rise from $500 million in 2017 to an estimated $800 million.

The company is also reportedly going to make ad space available on its Alexa/Echo platform; a significant opportunity for brands, considering Amazon estimates that 30 per cent of all customer interactions will be via voice by the end of this year.